Wednesday, 20 December 2006

View From Labour Article

Following is a copy of the recent View From Labour Article that Jim VanDusen submitted and that was published in the AV Times recently. Clicking on the link above will give you a PDF version of the article.

Catalyst demands concessions from Port Alberni Division

In September the CEP Local 592 Wage Delegates met with representatives from the Senior Management group of Catalyst Paper regarding the CTMP project and the Yellow Book (a new Directory customer) agreement.

Ron Buchhorn, Senior Vice President of Operations, began by saying they have signed a tentative deal with Yellow Book but without commitments from both locals and the city they are not prepared to invest in our mill. For us to get the major investment needed for this project they stated that they need concessions from both locals and get a commitment on city taxes. The concessions they were demanding included both local items and Main Wage items. Main Wage items being those that are included in the main body of our Collective Agreement and are part of the Pattern settlement negotiated during the last round of negotiations.

They made it abundantly clear that if a deal was not reached they will run the Yellow Book order in Crofton and they would not be asking anything from them to do so. If this happens then they will eventually shut down # 4 Paper Machine and run # 5 Paper Machine only. This would result in a further lay off of approximately 200 more members.

The Wage Delegates from Local 592 and 686 and the Presidents from the other Catalyst locals met with Ron Buchhorn and Russell Horner, President & Chief Executive Officer of Catalyst. Russell Horner confirmed that their Board of Directors were fully aware of the concessions and they must have them before they will invest any Capital in our mill. He attempted to justify the need for these by talking about the concessions given up in Port Alice, Bowater and Maramachi.

Unlike these other mills Catalyst is not seeking concessions due to financial hardship. They will receive a full return on their investment of $25 million within 2 ½ years. They will be the lowest cost producer of Directory paper in North America and earn approximately $170 per tonne more than they currently do at our mill. This represents about $21 million per year above their present earnings and they still want concessions from the unions and the city.

In an attempt to get an agreement we presented them alternatives that would give them more value than the combined list of concessions they said was required for a less than 2-year payback. We also offered them many ways to improve the efficiency of our Paper Machines, reduce costs and be competitive moving forward. After all we thought that was the goal.The company did not address anything that we brought forward. They once again read us their entire list of concessionary demands and told us it was all or nothing.

In my opinion the manner in which Catalyst Paper chose to handle this lacked integrity and absolute disrespect for the union. There is no doubt in my mind that the best business case is to put both the project and Yellow Book here in Port Alberni. Their goal of becoming the lowest cost producer of Directory Paper can be obtained without any concessions at all.

The company’s imposed deadline of November 17th has passed and the company announced that because we were unable to reach a deal with the unions Catalyst would not be going ahead with the 25 million dollar capital investment in Port Alberni. It will be business as usual and it will be necessary to reduce costs to continue running # 4 Paper Machine.

Their statement that they were unable to reach a deal with the unions is absolutely ludicrous. That statement implies that both parties actually attempted to negotiate some kind of agreement. Right from the beginning this company never had any intention on accepting anything other than their complete list of concessions.

We were informed that this is the new way they intend on doing business within their company and before any locals get any Capital Investment they will receive a list of demands. However, I found it very interesting that when Powell River was recently presented with their list of concessionary demands their management group chose to include only local items and did not ask for any Main Wage items. It is early in the process but it appears that they are going to sit down and talk with the unions rather than take the, do it or else, approach that we were given. I am not sure why they are dealing with them so much differently, but maybe they actually want to resolve their issues and not just demand concessions, time will tell.

This is certainly not the same company we worked together with to achieve an unprecedented early negotiation a few short years ago. We agreed to an early negotiation because we were assured that if we gave them the comfort of a 5-year deal we would get a no concession agreement. They got the comfort for their customers and we are only in the 3rd year of a five-year deal and they are coming after concessions from our Collective Agreement.

I was foolishly optimistic but I believed that if both the union and the company had the same goal then we could work together and come up with something we could all agree to. But the way this has unfolded I can only conclude that either they never had any intention on investing here or it was always just about getting concessions from the unions.

Last month Russell Horner sent Mayor McRae a letter declining the city’s generous offer of a tax reduction worth about $1.5 million over 5 years stating it was helpful but it stops far short of achieving competitive parity.

I will conclude with a quote from our CEP Western Region Vice President, Don MacNeil that sums it up quite nicely. “We are sure wondering what game Catalyst is playing.” “They talk about investing money to improve operations and increase profits but for some reason they are still demanding concessions from our members in Port Alberni rather than just simply going ahead with this lucrative investment. If they think for one minute that they are going to get concessions from our members just to improve profits for shareholders, they have another thing coming.”